Retirement in the United States is a serious issue because a large proportion of Americans strive to reach it as soon as possible. This is because Americans who reach an advanced age but are still unable to retire may come to regret some of the decisions they made while working.
Nonetheless, in recent years, a retirement option other than Social Security has grown in popularity. In this sense, we are referring to FIRE (Financially Independent, Retire Early). If we can join FIRE, we will be able to enjoy our retirement for longer.
However, not all citizens of the United States are capable of doing this. Furthermore, it is important to remember that not everything is entirely up to the citizen, and that there are other factors to consider when planning our retirement. In any case, one thing is certain: when planning for retirement, we must consider all available options.
Basic principles for Early Retirement
Whether we are part of the FIRE movement or simply want to retire as soon as possible, one thing is certain: we must organize our finances so that we can enjoy everything about our retirement.
As a result, we must focus on a few fundamental principles. We cannot pass up this opportunity to improve our lives right away. These are the fundamental principles for early retirement:
- The 70-90 rule. If we want to retire early, we should be able to replace approximately 70% to 90% of our current income through Social Security and a private retirement account. So, if this is possible, we will have done a great job.
- The 4% rule. In addition to the foregoing, there is the belief that if there is no annual excess of 4% of your diversified portfolio, the funds for retirement will be adequate. Of course, we must consider inflation.
- Moving can be a good option. We don’t have to live in the same house during our working lives as we do when we retire. If we want to retire as soon as possible, cutting back on expenses can be critical and fundamental. When it comes to retirement, it is critical to be realistic and plan carefully for the next steps.
With all of this in mind, each individual must make their own final decision regarding whether or not to apply for Early Retirement. Even so, we must keep in mind that Social Security does not begin until the age of 62.
